Reddit sells Bitcoin Stash and moves away from cryptocurrencies: details

Reddit, a pioneering social media force in crypto participation and arguably the most popular discussion forum, dumped a substantial portion of its virtual asset holdings in the third quarter of 2024.

In its latest regulatory filing, the company revealed that it sold the majority of its bitcoin (btc) and ethereum (eth) treasury assets, generating $6.87 million.

Reddit makes profits

The considerable sum made from the sale helped Reddit turn a profit for the first time in its 19 years of existence, to the tune of just under $30 million.

It first disclosed cryptocurrency investments in a February 2024 initial public offering filing with the Securities and Exchange Commission (SEC), stating that it had invested some of its excess cash reserves in several cryptocurrencies, including btc, eth and Polygon (MATIC).

According to that filing, eth and MATIC were primarily intended to make payments for specific virtual goods.

At the time, he said the net book value of the assets in question was “immaterial.” The social platform also indicated that it would not invest in any other cryptocurrency unless the authorities concerned confirmed that they were not securities.

For years, the platform has maintained a strong association with cryptocurrencies, being one of the first spaces to experiment with blockchain technology. Some memorable milestones include its decision in 2013 to accept premium membership payments using cryptocurrency.

Additionally, in 2020, it launched a Community Points system based on ethereum, a pioneer in interaction through digital assets. The system involved two tokens, MOON and BRICK, which the social network used to incentivize contributions within specific subreddits.

The company later developed a blockchain-based wallet called “Vault,” which allowed users to manage the two tokens and other digital collectibles. This was followed by the launch of Polygon-based nft avatars in 2021.

Withdrawal of cryptocurrency-driven strategies

However, in his last shipment Before the SEC, Reddit expressed a changing perspective on crypto assets. While acknowledging the “significant potential” of the industry, the company said it was concerned about the uncertainties surrounding its long-term adoption.

Additionally, it has reinforced its cautious stance by updating its investment policy to require board approval for any future cryptocurrency purchases, which would be limited to bitcoin, ethereum and other non-securities tokens.

Additionally, the platform has since decommissioned its Community Points system, blaming the move on scalability challenges. It has also phased out acceptance of cryptocurrencies for payments, reflecting a gradual reduction in blockchain initiatives that previously involved users.

Interestingly, Reddit's decision to divest came before bitcoin's recent rally, which saw the asset rise agonizingly close to its all-time high of $73,737.

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